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Comparision (DIAGONAL BULL CALL SPREAD VS LONG PUT)

 

Compare Strategies

  DIAGONAL BULL CALL SPREAD LONG PUT
About Strategy

Diagonal Bull Call Spread Option Strategy

This strategy is implemented by a trader when he is neutral – moderately bullish in the near-month contract and bullish in the mid-month contract. It involves sale of 1 Near-Month OTM Call Option and buying of 1 Mid Month ITM Call Option.

Long Put Option Strategy

This strategy is implemented by buying 1 Put Option i.e. a single position, when the person is bearish on the market and expects the market to move downwards in the near future.
Risk: The maximum loss will be the premium amount paid.< ..

DIAGONAL BULL CALL SPREAD Vs LONG PUT - Details

DIAGONAL BULL CALL SPREAD LONG PUT
Market View Bullish Bearish
Type (CE/PE) CE (Call Option) PE (Put Option)
Number Of Positions 2 1
Strategy Level Beginners Beginners
Reward Profile Limited Unlimited
Risk Profile Limited Limited
Breakeven Point Strike Price of Long Put - Premium Paid

DIAGONAL BULL CALL SPREAD Vs LONG PUT - When & How to use ?

DIAGONAL BULL CALL SPREAD LONG PUT
Market View Bullish Bearish
When to use? A long put option strategy works well when you're expecting the underlying asset to sharply decline or be volatile in near future.
Action Buy 1 Long-Term ITM Call Sell 1 Near-Term OTM Call Buy Put Option
Breakeven Point Strike Price of Long Put - Premium Paid

DIAGONAL BULL CALL SPREAD Vs LONG PUT - Risk & Reward

DIAGONAL BULL CALL SPREAD LONG PUT
Maximum Profit Scenario Profit = Strike Price of Long Put - Premium Paid
Maximum Loss Scenario Max Loss = Premium Paid + Commissions Paid
Risk Limited Limited
Reward Limited Unlimited

DIAGONAL BULL CALL SPREAD Vs LONG PUT - Strategy Pros & Cons

DIAGONAL BULL CALL SPREAD LONG PUT
Similar Strategies Bull Put Spread Protective Call, Short Put
Disadvantage • 100% loss if strike price, expiration dates or underlying stocks are badly chosen. • Time decay.
Advantages • Limited risk to the premium paid. • Less capital investment and more profit. • Unlimited profit potential with limited risk.

DIAGONAL BULL CALL SPREAD

LONG PUT